Reddit shares surged 22% in extended trading on Tuesday, reaching the $100 mark for the first time. This significant jump follows the company’s announcement of third-quarter results that exceeded analyst predictions. These results underscore Reddit’s strong market performance since its public debut in March, marking the third earnings report since going public.
Reddit Stock Reaches New Milestone
The company’s impressive financial results included:
- Earnings per share: 16 cents, surpassing the expected loss of 7 cents.
- Revenue: $348.4 million, exceeding the analyst forecast of $312.8 million.
- Fourth-quarter adjusted earnings projections: Range from $110 million to $125 million, compared to the average estimate of $85.2 million.
- Fourth-quarter revenue forecast: Between $385 million and $400 million, exceeding the average analyst estimate of $357.9 million.
Steve Huffman, Reddit’s CEO, attributed part of this success to the platform’s resilience against changes in Google search algorithms and efforts to simplify account creation for new users. In August, Huffman emphasized the importance of these adjustments in attracting more users to the platform.
“It was another strong quarter for Reddit and our communities as we achieved important milestones, including new levels of user traffic, revenue growth, and profitability.” – Reddit CEO Steve Huffman
Reddit’s market cap now stands at an impressive $13.6 billion, with the stock almost tripling in value since its initial public offering (IPO). The company reported a 68% increase in third-quarter revenue from a year earlier, enabling it to achieve profitability with a net income of $29.9 million. The rise in daily active users by 47% year over year to 97.2 million further demonstrates Reddit’s growing user base, beating analyst estimates of 96.5 million.
Reddit Sees Major Growth in Daily Active Users
In addition to logged-in user growth of 27% to 44.1 million globally, Reddit saw a substantial 70% increase in global logged-out users, reaching 53.1 million. Despite newer users generating less advertising revenue when logged out, this growth highlights Reddit’s expanding reach and potential for future monetization.
Featured Image courtesy of TIMOTHY A. CLARY/AFP via Getty Images
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